Rickmers Maritime Trust

[Aldar]

The problem for Rickmers is that 2014 sees four long term charters expiring (the company currently only has one ship on short term charter) and 2015 sees another five expiring. The current long term charters pay about USD 24-25,000 a day but the spot market is only around USD 6-7,000. The company will still be fine in 2014 but 2015 will see a major impact on cashflows unless there is a strong market recovery. Although old ships are increasingly being scrapped, there are still plenty of newbuilds scheduled for delivery so the shipping container market continues to be in imbalance.

Indeed. In addition, my understanding from my logistic acquaintance is that the whole container shipping industry is undergoing a transformation and reorganization in terms of how goods are moved.

As a result small container ships are rapidly falling out of favor. Rickmer's ships are all quite small <5,000 TEU if I'm not wrong. This doesn't bode well.

Maersk Monster Ships Create Capacity Glut to Clip Kuehne
Bloomberg 15 Oct 2013

http://www.bloomberg.com/news/print/2013...wdown.html

A.P. Moeller-Maersk A/S (MAERSKB)’s fleet of 1,300-foot container ships has worsened a capacity glut that’s depressing freight rates and eroding earnings, Kuehne & Nagel International AG (KNIN), the No. 1 sea-freight forwarder, said today.

The three Triple-E class ships, the largest in the world, are exacerbating the effects of slowing demand on routes linking Asian exporters with consumers in Europe, Kuehne & Nagel Chief Financial Officer Gerard van Kesteren said in an interview after the company’s third-quarter profit missed analyst estimates.

Maersk has ordered 20 Triple-E vessels as the Copenhagen-based company seeks to cut operating costs per container and grab a bigger slice of a market that’s struggled to recover from the global slump and European debt crisis. Kuehne & Nagel, whose stock fell the most since March on the profit figures, is among companies most exposed to the capacity glut as it buys deck space from Maersk and its competitors to consolidate shipments.

“There is structural overcapacity, and now the 18,000-container ships are being put into production by Maersk, creating extra overcapacity,” van Kesteren said. “Shipping lines are trying to get business back. It’s cutthroat competition.”

Shares of Schindellegi, Switzerland-based Kuehne fell 4.3 percent, the steepest intraday decline since March 4, and were trading 4 percent lower at 113 francs as of 4:02 p.m. in Zurich.